Image credit: A/S Global Risk Management

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Compared to one month ago, Brent oil price has dropped around $14 to currently $72.4. U.S. waivers to Iranian sanctions, fears of global economic slowdown weigh on prices.

The U.S. oil and financial sanctions against Iran has now been reimposed. More details on the sanctions will be released later today by the U.S. secretary of state and treasury secretary. Some waivers to the sanctions have allegedly been given already, and top importers of Iranian oil (China, India, South Korea, Japan and Turkey) along with a couple of still unannounced countries will hence be allowed to import Iranian oil temporarily. Along with news of record-high U.S. crude oil production and Russia's oil output close to record in October, fears of supply shortage are fading, at least for now. Also, Saudi Arabia has pledged to increase production to offset the missing Iranian barrels going forward and OPEC oil producers upped production.

The weekly oil rig count from Baker Hughes showed a decline of 1 active oil rig to currently 874. The drop comes after 3 consecutive weeks of increases in the number of active U.S. rigs. As long as U.S. production continues to increase, a one-rig drop is not likely to cause market jitters.

Turning to economic data, overnight saw Chinese Caixin Services PMI for October which was lower than previous (50.8 versus 53.1). Later today, UK Services PMI, U.S. ISM Non-Manufacturing PMI could give some market volatility.